GST Compliance Checklist for Year-End | FY 2023-24

Table of Contents

1. Key GST Compliance Deadlines
2. Financial Year-End Adjustments
3. Additional Considerations
4. Comprehensive list of Year End Checklist under GST
5. Due dates of various declarations and options under the GST Act
6. Closure of books of accounts
7. Other important points

1. Key GST Compliance Deadlines

• Filing of Letter of Undertaking (LUT) for zero-rated supplies by 31-03-2024
• Opting for the Quarterly Return Monthly Payment (QRMP) scheme between 01-02-2024 and 30-04-2024 for eligible registrants
• Enrollment in the Composition Scheme by 31-03-2024, with subsequent ITC reversal filing due by 30-05-2024
• Goods Transport Agency (GTA) declarations for the Forward Charge Mechanism (FCM) choice from 01-01-2024 to 31-03-2024.

2. Financial Year-End Adjustments

• Annual Reversal of Input Tax Credit (ITC): Required adjustments based on Rule 42 and Rule 43 of the CGST Rules, 2017, with the final accounting in March 2024 GST returns. Late reporting may incur interest from 01-04-2024
• Reconciliations: Ensuring accuracy through reconciliations between books and GST returns, physical versus book stock, e-way bills, and review of HSN/SAC codes and GST rates
• Matching ITC and Reversals: Comparing ITC in books and as per GST returns, with adjustments for any discrepancies by March 2024.

3. Additional Considerations

• New Invoice Series Requirement: From 01-04-2024, taxpayers must adopt a unique invoice series for each financial year to comply with GST rules and facilitate smooth E-way bill generation and GST filings
• Aggregate Turnover Calculation: Critical for determining eligibility for various schemes and GST compliance requirements for FY 2024-25
• E-Invoice Registration: Mandatory for taxpayers with an aggregate turnover exceeding Rs. 5 crores in FY 2023-24, effective from 01-04-2024
• Machine Registration for Specified Manufacturers: Required by 30-04-2024 for manufacturers of goods like tobacco, following new GST procedures effective from 01-04-2024

4. Comprehensive list of Year End Checklist under GST

As we approach the conclusion of the financial year 2023-24 and prepare for the financial year 2024-25, it is imperative for the businesses as well as the professionals to remain abreast of Goods and Services Tax (‘GST’) implications that could impact the annual closure of books and future strategizing. Navigating the shift from one year to the next requires attention to the regulatory compliances, strategic decision-making such as considering options like opting for composition scheme, QRMP scheme, etc.

In this article, we will cover all the possible compliances that one may need to comply for a smooth transition for the upcoming year.

5. Due dates of various declarations and options under the GST Act

The list of due dates for various provisions that taxpayers should be aware of for the Financial Year (‘FY’) 2024-25 are summarized in the below table:

6. Closure of books of accounts

As the end of the year approaches, adjustments are required to be made in the books of accounts and returns to avoid any mismatches at a later stage.

6.1 Calculation of reversal of common ITC on annual basis

The GST law requires to apportion the input tax credit on account of non-business purposes or exempt supplies. Such reversal, on account of exempt supplies or inputs used for other than business purposes is firstly required to be made on monthly basis in the manner given in Rule 42 of the CGST Rules, 2017 (‘CGST Act’) on input and input services and as per Rule 43 of the CGST Rules on capital goods.

However, at the end of the financial year, the value of reversal is required to be adjusted by calculating it on annual basis.

Requirement of reversal under Rule 42 of the CGST Rules

After having undertaken monthly reversal on inputs and input services, the annual calculation is required to be done and any excess or shortfall in the reversal should be duly accounted for in GST returns for the tax period of March 2024.

Requirement of reversal under Rule 43 of the CGST Rules

After having undertaken monthly reversal of common credit on capital goods, the annual calculation is required to be done and any excess or short reversal should be duly accounted for in GST returns for the tax period March 2024.

It is important to note that in case of delay in reporting of additional reversal, if any, Interest would apply from 01-04-2024 onward for common ITC reversal which should have been done in FY 2023-24.

6.2 Various reconciliations are required to ensure accuracy in reporting outward supplies

• Turnover as per books of accounts versus GST Returns (Form GSTR-1 and Form GSTR-3B)
• For identifying the shortage/excess stock if any, prepare a reconciliation of physical stock versus stock as per books of accounts.
• Reconciliation of E-way bills generated during the FY 2023-24 with tax invoices reported in Form GSTR-1.
• Review the correct HSN /SAC code and GST rate has been opted.
• Reconciliation of E-Invoices with IRN viz. E-way bills generated viz. reported in Form GSTR-1.

6.3 Matching of Input Tax Credit (‘ITC’) and its reversals.

 Various reconciliations are required for matching the ITC.

• ITC as per audited books of accounts versus ITC as per Form GSTR-2B
• ITC as per audited books of accounts versus ITC claimed in Form GSTR-3B
• ITC as per Form GSTR-3B versus Form GSTR-2B
• Check the closing balance of ITC as per books of accounts versus closing balance as per electronic credit ledger
• ITC which is not matched with Form GSTR-2B needs to be reconciled and adjustments need to be done in output tax liability in return for the tax period March 2024

7. Other important points

7.1 Requirement of new invoice series from April 01, 2024

GSTIN advisory provides that a taxpayer should have unique invoice series for every financial year. Similar provisions have been included under Rule 46 and 49 of the GST Rules, 2017.

Hence, the taxpayer is required to reset the invoice series at the beginning of the financial year. If this provision is not adhered to, apart from the compliance issues, a taxpayer may face problems while generating an E-way bill on the E-way bill system, or furnishing their Form GSTR-1, or applying refund on the GST Portal. Therefore, it is necessary that suitable modification may be made by the taxpayers in this regard in their invoices or bill of supply, to avoid any inconvenience in the future. 

7.2 Calculation of aggregate turnover as per the required provision for various compliances related to FY 2024-25

Strategic decision-making and various GST compliance depend on the amount of aggregate turnover of the preceding year such as registration requirement, QRMP scheme, composition scheme, etc. Thus, the calculation of aggregate turnover should be aligned as per the applicable provision of the respective requirement.

7.3 Requirement of registration for generating E-Invoice

Taxpayers having an aggregate turnover of more than Rs. 5 crores in FY 2023-24 is required to issue E-Invoice for the first time w.e.f. 01-04-2024. Thus, they need to register themselves on the invoice registration portal and start generating E-invoice.

7.4 Machine registration by manufacturers of specified goods

Special procedure has been prescribed by issuing notification no. 04/2024- Central Tax, Dated 05-01-2024 under the GST law for the manufacturers of specified goods such as tobacco, pan masala etc. such as machine registration, special monthly compliances etc. with effect from 1-04-2024. Any person registered on 01-04-2024 and is engaged in the manufacturing of such specified goods is required to get his machines registered by 30-04-2024.